Summitville discusses dissolution

July 25, 2014

SUMMITVILLE-Faced with what is likely an insurmountable debt, dissolution of its village government may be the most viable option for the community of Summitville.

On Wednesday, members of council explored the debt-laden village's options going forward with help from the assistant chief of the Local Government Services Section (LGS) of the state auditor's office.

However, before LGS representatives took the floor to explain the dissolution process, the meeting got off to a rocky start.

Village Council members, most of whom were appointed in January, criticized Mayor Robert Marra for missing the previous two village council meetings without prior notification and for inviting LGS officials and the media to the meeting without first discussing the possibility of dissolution with them. Most council members agreed they believed Marra acted out of line by abruptly introducing the prospect of dissolution.

"We should have had this discussion last month," said Councilman Fred May, who also said he was in favor of "keeping the village afloat" if possible.

Marra defended his absence at the previous meetings by saying he was dealing with family matters and did not owe council members an explanation. He disputed the notion that he acted out of line by inviting LGS officials and the media to the meeting and said a serious discussion of dissolution was over due.

Marra claimed that, with a recently-passed 2015 budget showing almost no money available for operation and the village owing the state approximately $15,000 for past audits, the village had few options other than to dissolve.

"All we're able to do is turn the street lights on and pay council and (Fiscal Officer) Bonnie (Moore), and there's not one dollar for street maintenance or anything else," said Marra.

Moore confirmed that the village is currently making payments of $200 per month toward its debt to the state, adding officials "want their money now." Overall, Moore said, with the scant financial information available to her, the village is "still in the positive," but she noted she does not have a complete picture of village finances due to the disorderly state of the village's books.

Marra said he had contacted the private firm currently performing the audit of the village and was told that they are getting closer to having the village's books straightened out.

The mayor contended that, with the village only able to make small payments on its debt and with additional charges from the state being assessed on a bi-monthly basis, the time to dissolve the village was now, before any more debt could accumulate. He said timely action would prevent the village from passing on its debt to Franklin Township, which would absorb the village's debt if dissolution is approved by the voters.

"Now's the time to act, because in six more months we're going to be in debt more," said Marra. "So you have the opportunity to correct this, still be a village, still be locally controlled and without debt passing on to another entity."

In terms of transferring assets to the township, Marra said the township would assume responsibility for the village's 1.1 miles of roadway and ODOT would assume care of the portion state Route 644 that runs through the center of town. He argued that this would be beneficial to the village, as both the township and ODOT have more resources and funds to repair and maintain the village's roadways.

Following the heated discussion between council and the mayor, Dave Thompson, the assistant chief of the state auditor's LGS Section, took the floor to explain the dissolution process. Thompson, who has more than 20 years of experience guiding small villages through the dissolution process, prefaced his remarks by saying he did not attend Wednesday's meeting to convince the council to dissolve.

"Honestly, we are here just to explain," said Thompson. "We're not here to sell anything. I drove all this way to get your questions answered."

Thompson told council that he is seeing more and more small villages, similar to Summitville, dissolve due to a lack of revenue and decreases in state funding.

He described the dissolution process as a legal one consisting of several steps. The first is circulating a petition among residents to place the issue of surrendering corporate powers on the ballot. The petition must contain 40 percent of the elector, which is determined by the number voting in the last election. He said the petition can not be started by a council member or any other member of the local government, rather it must be initiated by a private citizen.

Once the necessary number of signatures is collected, the petition must be presented to the village council, which then takes it to the county board of elections to determine if all the signatures are of registered voters. Once that determination is made, village council must pass a resolution or ordinance to put the issue on the ballot.

"This is not a process that is decided by this board," said Thompson. "It's really up to the community."

When asked by Moore if it was too late to be part of the November election, Thompson responded that he believed the deadline to get an issue on the ballot was August 6.

"Whether it could or couldn't be (on the ballot) is up to how quickly the process happened," said Thompson, noting that, in his experience, once a dissolution makes it on the ballot it usually passes in the election.

During the question and answer portion of his presentation, Thompson addressed council concerns about the transfer of the village's assets to Franklin Township, should voters approve a dissolution. Thompson explained the transfer would also be a multi-step process consisting of transferring the village's assets, as well as liabilities. Property, such as a village-owned mower and the tennis courts, would be transferred to the township, as would cash.

Thompson noted that, although Franklin Township would take on the village's debt it would also gain the village's residents as a tax base, which he speculated would offset any negative financial impact to the township. As for tax levies, village residents would assume the township's levies and begin paying its tax rates.

Franklin Township Trustees do not have the option to deny absorbing the village should voters decide to dissolve, according to Thompson. After the transfer, village residents become residents of the township and are subject to township laws.

Thompson summed up the situation faced by the village by saying council should weigh the feasibility of raising additional revenue needed to pay off the village's debts and continue operating against the advantages of dissolution.

"The bottom line is what do people in the community want?" said Thompson. "Do they want to dissolve into the township and pay the tax rate of the township or do they want to take on the burden of additional real property taxes or additional income taxes or you finding ways of reducing expenditures to make the deficits or debt go away in a reasonable amount of time."